Darius Phillips Professor Cuthbert English 99 September 5, 2014 Journal #1

Migoya, David. “Getting Carded.” Along These Lines, Writing Paragraphs and Essays. John Sheridan Biays and Carol Weshoven Summary In his essay, “Getting Carded”, David Migoya talks about the serious problems that befall college students when they start using credit cards. These problems don’t bother the credit card companies at all, who aggressively market cards to this young population, counting on statistics indicating that once students start using a particular type of card, they stay loyal to that type throughout their adult years. The companies are also willing to take risks on students because they know that parents will often “swoop” down and rescue them by paying off their large debts. According to Migoya, most students are too irresponsible to use a credit card wisely. They use it to buy unnecessary purchases like beer and pizza and see the card as an extension of their income instead of a “tool of convenience.” As a result of spending money they don’t have, they get into massive debt. More insidious than the debt are the late fees and high interest rates. “Put simply,” says Montoya, “a student who consistently pays only the monthly minimum is likely to hit financial ruin quickly.” Migoya emphasizes that these early credit problems follow students as they enter the adult world, making it difficult to get low interest rates on major purchases and even affecting their ability to be hired. At the end of his essay, the author relays the advice of a financial expert: if a student wants to use a card to build good credit, he or she should shop around for one with a low interest rate, a grace period for

lateness, and a cash back or bonus points system. Migoya also offers less risky alternatives to credit cards, such as secured cards, charge cards, and prepaid cards. Reflection When I was younger, I did not like using credit cards. I thought of them as “a slippery slope” towards debt. Somewhat of a conspiracy theorist back then, I also thought that credit cards were a good way for a small group of powerful elites to collect a lot of information about people and thereby have more opportunity to control them. It was only a matter of time when we each would have a chip embedded under the skin of our wrists. The code on the chip? 666, of course. Anyway, since then my attitude toward credit cards has changed completely. Not only have I come to use them for all major purchases, I have become one of those people who never carries cash, using plastic for something as small a cup of coffee. And contrary to my fears, I have not slipped into a pit of debt. In fact, except for my mortgage and my car, I am debt free. How have I managed to do this? There are several things I do consistently that keep me in the black. First of all, I always pay the entire balance on my monthly bill so I can avoid being hit with the

interest rate. If I have overspent, and the amount is large, I use my savings to pay it. Knowing that I might have to dip into my hard­earned savings keeps me from overspending, although I suspect that if I kept a ledger of my credit card spending, that would be even more effective. My biggest fear, of course, is paying interest. I found out last summer how fast it can snowball. My family had come back from vacation; we were low on funds and had racked up some pretty high credit card bills while travelling. I had no choice but to pay only part of the bill. The next bill was astounding. Not only did it include the “leftover” with interest, but it also had the amount for whatever I had purchased that month. It took me

an agonizing while to whittle the debt down, and I vowed that I wouldn’t let us get into that situation again. My next secret is never to buy a big ticket item with a card unless I can get at least six months of no interest. I use this system for every expensive purchase: large appliances, my daughter’s violin, and even medical procedures. This way, I can take advantage of smaller payments and not have to worry about interest. I just have to be sure to pay the whole thing off at the end of the promotion period, or the company will charge the accumulated interest for all those months. The key to making this no interest system work is to stagger my big purchases, never having to pay for more than one or two at a time. This means I can’t have everything I want when I want it, but the alternative is to carry more debt load than I am comfortable with. My final method for staying relatively debt­free is my use of the debit card. I use this card for groceries and for all small purchases, like restaurants, gifts, and clothes. All the money comes from a separate account, my checking account, and every time I buy something with the card, I record it, just as though I were writing a check. I can only use as much money as is in the account, so it’s impossible to spend money I don’t have. At the same time, I don’t have to deal with the inconvenience of using cash or writing checks. As long as I stick with my system, I don’t get into trouble. I’d be lying, though, if I said I always stick to it. Sometimes, when I’m running low on my debit funds and still want something anyway, I find myself paying for it with my credit card, essentially spending money I don’t have. Sometimes I use my credit card when I’m in a hurry and don’t have time to record the amount of my purchase in my checkbook. Sometimes I’m just too lazy to record anything so I find myself sliding credit plastic instead

of debit. I know that if I cut up all my plastic and used only cash and checks, I’d save a lot more money. But I’m unwilling to do this, mainly because I don’t want to have to calculate how much cash I will need for the week. I just can’t be as spontaneous with cash. Of course, it’s spontaneous spending that gets people in trouble. I’ve been there. So I need to stay disciplined and stick to my system: paying my whole balance each month, taking advantage of no interest promotions, and using a debit card for weekly expenses.